I have received a number of calls and emails over the last several days asking for my opinion on the CryoPort quarterly report. I have been dealing with and preparations for Tropical Storm Fay, which we thought was going to hit us directly as a potential hurricane, so I have not had time to update before now. Thankfully, my area has thus far been spared a majority of the effects of this storm, but say a prayer for those in the Melbourne, Florida area as they have received in excess of 24" (2 FEET!) of rain over the last 2 days and it is still raining.
As to CryoPort's 10Q. Well, unfortunately it is about what I expected. There is a very small buildup of inventory and they spent about $2M of the cash they have brought in during the past year. Now, if there was something to show for that cash, I would feel a little better. However, unless I am just missing something, I don't see assets on the books that indicate to me that those funds were used for much other than covering operations and old debts. I was hoping for an announcement of some type of deal, but it has not materialized to date. It is hard for me to understand the idea of getting ready to roll out the program in any meaningful way, while having virtually no inventory and having actually shipped very few units, but I feel sure they have their reasons.
I will say this about Mr. Berry. Peter has run a pretty tight ship for several years, often times stretching money as far as it could possibly go. That said, I don't think the company is wasting money. On the contrary, he is generally a very good steward of the funds. My biggest area of concern is that since announcing production began in December, CryoPort has only produced around $100k of product. That would be about $15k (dollars) per month or maybe a couple hundred shippers each month. Something doesn't make sense in that scenario. Either they have not been in manufacturing as we were led to believe with company press releases, or the inventory that was supposedly being built up is not being reflected on the books as one might expect. I suspect that the company has only made as many units as the pilot programs required, which is fine, but it does seem strange to think that the roll out is near, yet no inventory has been created.
I will be asking some questions to try to get some answers and will report my findings on this blog in the future. I have heard rumblings from a couple of sources that indicate there may be something coming soon, confirming the comments in the shareholder letter. However, I can not confirm anything at this time as to either who the deals are with and at what level. Hopefully I can get some clarity over the next couple of weeks. Perhaps there will be news in that time frame.
If I have not received confirmation or clarification as to the business developments alluded to by Mr. Berry in the shareholder letter by the end of August, I will request a firm date for the annual shareholders meeting. Last year this was held in October, and I would expect roughly the same this year. I have several large shareholders, plus myself, that are interested in attending this year's meeting and we need appropriate notice to address any scheduling conflicts so that we can attend. If a firm date is not provided, I will politely help provide one by calling for a shareholder's meeting with the proper notice and voting minimums.
I am hopeful that my involvement as anything other than a shareholder and the biggest cheerleader on the street will become a moot point. However, if we happen to fall back into a communications rut, I don't intend to stay on the sidelines.
